Clean Seas Seafood (ASX: CSS) has reported strong growth for the 2019 financial year to date, with sales revenue trending upwards on the back of new customer growth.
The company, which is involved in the breeding and farming of Yellowtail Kingfish, revealed to shareholders today that global sales volume for January and February was up 40% on the prior corresponding year.
In the business update, the company reported a 25% increase in the core Australian market for the two months, reflecting new customer growth from the chef activation program and recaptured market share from local competitors.
The sales growth has been achieved despite large farm gate prices rising 4% to $14.77 per kilogram.
The large fresh category continues to be the company’s largest product segment, repressing 66% of volume in January and February.
In the premium frozen product category, sales of 106 tonnes were triple the sales of the same period in FY18. Clean Seas said the launch of SensoryFresh has seen the premium frozen category increase from 19% to 34% of total sales in the past year.
The company is progressing its international expansion strategy, with all regions recording solid growth throughout January and February.
Year-on-year sales growth in Europe was up 49% with Asia up a massive 304%.
“The growth in Europe has been achieved despite increased competition from local European land-based farms with selling prices significantly below Clean Seas,” the company said.
“The superior Spencer Gulf Hiramasa product, investment in the Spencer Gulf brand marketing campaign, the Chef Activation program and visits to the Clean Seas operations in the Spencer Gulf by major European distributors and leading chefs have all contributed to this positive result.”
In November last year, Clean Seas inked a major Chinese distribution agreement with Hunchun Haiyun Trading Co, which the company described as a material step forward in executing its international growth strategy.
Over in North America, the company said that sales of SensoryFresh were due to start in the market in April, with the first shipment of inventory already in transit.
FY19 guidance maintained
While the company had a slow start to FY19, Clean Seas said the improved rate of growth during the second and third quarters suggested it remained on track to deliver FY19 sales volumes of approximately 2,750t, in line with previous guidance.
The result would represent a 17% increase from the 2,353t sold in FY18.
For the first-half of FY19, the company achieved sales revenue of $21.6 million and sales volume of 1,264t.
The company is planning to continue to invest in its sales and marketing capabilities to support long-term sales growth in Europe and to expand its presence in the US and Asian markets.
Clean Seas shares climbed 6.3% in morning trade to $0.925.